The rise and fall of Yorkshire Foward

The Government has just scrapped Yorkshire Forward, the agency charged with attracting jobs, businesses and investment into the region.

Rod McPhee looks at their achievements, their problems and where we go from here

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To some it's a bureaucratic super-quango with an over-inflated budget and an overbearing influence on the region, to others it represents a saviour of the local economy, pumping hundreds of millions into worthy companies and key regeneration projects.

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It was created in 1999 under the Labour government, but when the Conservatives came into power, they decided the RDAs were an expensive tier of government we could do without.

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Last month it was confirmed that Yorkshire Forward, and its eight sister organisations across the UK, will be scrapped within two years.

Bosses at Yorkshire Forward insisted they had delivered. For every 1 they spent they calculated the return for the local economy was four times that. When they spent that same pound on a business they received 10 times the return.

This is no mean feat considering the RDA boasts a huge annual budget. During the last financial year that budget was 361m. This year Yorkshire Forward has been forced to make cuts and is now working with a budget of 230m.

Current chief executive Thea Stein laments the loss.

"I have just over 400 people to make redundant," she says. "Then there's a large volume of assets which we need to ensure are put in the best hands, I need to make sure that projects that are ongoing are put into the right place and all our work is handed over properly.

"I don't see my job now as a thankless task, just a complicated one – you can't close down an RDA overnight. But I do now fear for the future of investment in the region.

"I'm concerned on the direction of travel now. Having it all done nationally, I worry about the region losing out. If everything now goes into a nationally led process I seriously worry about what will be lost in terms of local leverage."

The loss of local influence is a fear shared by Councillor Andrew Carter. He was either leader or deputy leader of Leeds City Council over the last six years during which time the local authority was run by an alliance of Liberal Democrats and Conservatives.

During that period Leeds saw the renovation of Leeds Grand Theatre, Leeds City Art Gallery and a grant handed over for the soon-to-be-built Leeds Arena.

But Coun Carter still insists the city never got its fair share of grants from Yorkshire Forward.

"I've never been happy with regional structures," he says. "Yorkshire Forward has been a bit of a curate's egg really. There's been good things – good support on specific projects like Leeds Arena – but if you look at the spending of the RDA, it's been a sweety jar for South Yorkshire.

"Which is why I think things should be done on an even more local level. It should be sub-regional. Yorkshire Forward was too big and it was largely because it was regional.

"Which is why I think the Local Enterprise Partnerships could be of real benefit – I agree that we don't want everything to return to Whitehall and decisions should be taken not by regions but by city regions such as Leeds."

There's certainly some evidence to suggest this. YF's own figures show that over the last 11 years South Yorkshire, with a population of 1.3m, has received grants of almost 843m, while West Yorkshire, with a population of 2.2m, received grants worth 554m.

The suggested alternative of local Enterprise Partnerships would be created between local authorities and business leaders, but it's still not clear what powers they would have or what funding they would receive.

They are very much the preferred option of Coun Carter as well as the Government. Although he applauded the work of the agency across the region he also criticises them, believing they now have a huge property portfolio which they paid inflated prices for.

He also maintains the agency should never have had its remit expanded to include influencing transport, planning and housing, though he accepts this was forced upon them by central government.

Coun Carter also believes some of the decisions taken by the board of YF branded the organisation with a bad image.

Earlier this month, as it was announced their budget was being cut by 40m, they hosted a 26,000 awards dinner in Leeds entertaining 190 guests at 136 a head including hiring a guest speaker Michelle Mone, the founder of Ultimo lingerie.

"That was just crass," he says. "The board of Yorkshire Forward have shown a significant lack of control to allow those things to go on.

"Someone should have intervened and asked: 'Are you lot not in the real

world?'"

Last year eyebrows were also raised when it was revealed Yorkshire

Forward had just totted up an annual expenses bill of 600,000.

It included hotel and transport bills around Britain as well as the US, South Africa and across Europe. But the figure was also made up of the cost of hosting numerous events, conferences and meetings. 55,000 alone went on hotel bills.

But Thea Stein vehemently defends the organisation's spending.

She says: "It's absolutely appropriate that the RDA has had to go to places to talk to people, meet people and do its business, particularly in terms of attracting foreign direct investment which we've increased year on year.

"And if that meant staff went places, stayed overnight and did business then, well, good! If that's what we needed to do then that's what we had to do to achieve what we wanted for the region.

"We are scrutinised in our spending every step of the way, so it's nothing like a private business but then we get accused of being too inflexible and bureaucratic at the same time. Can you win? There's a big debate to be had about that."

This somewhat awkward state of having one foot in the private sector, the other in the public, is reflected in the criticism levelled at them by opponents such as the Tax Payers' Alliance. They not only argue that they give too many grants to the private sector but that they also give out research and development grants to organisations which many people would already consider to have enough financial backing.

For example, between 2007 and 2009 Yorkshire Forward gave research and development grants to huge multi-nationals. Rolls Royce received 345,000 and Unilever gained 610,000.

Thea Stein accepts handing money out to such names may cause surprise among the public but only if they aren't explained properly. Many can't be explained, however, due to commercial sensitivity.

But Birkby's Plastics in Liversedge, near Leeds, is a reasonable example, even if it doesn't quite have the same profile. Having previously produced parts for the car industry, the downturn in vehicle sales meant they had to switch to moulding different products which required them to buy new presses and equipment. Since this would actually create more jobs and expand the business, in 2008 Yorkshire Forward gave them a grant of 414,000.

But this isn't the Tax Payers' Alliance's only gripe. Spokesman John O'Connell says: "We set out a strong case for their abolishment in that they haven't set out their goals, especially in terms of changing the regional disparity.

"We also found that over 60 per cent of grants went to public sector organisations or organisations rooted in the public sector so they don't genuinely stimulate private enterprise.

"If anything the gaps between the regions has got bigger, it's not necessarily a north/south divide, the idea is that the south east in general was contributing more but London has still shot ahead so they failed in that objective."

YF insists they never aspired to compete with London and refute the figure of 60 per cent of money put into the public sector. They say this figure is between 32 and 38 per cent. Coun Carter also insists the alliance's analysis is somewhat misleading, pointing out that the Leeds Arena project might have been classed as a "public sector project" as it was led by the council, in fact it is largely funded with private finance.

O'Connell added: "RDAs have been around since 1999 and there's been no significant improvement, in fact we believe things have got worse. We believe that there should be tax relief for start-up small businesses and fiscal decentralisation.

"Local areas should be able to set their own tax levels so areas can be competitive."

Whether they're opponents or supporters the constant theme which appears surrounding the future of the region after 2012 seems to be one of decentralisation. There seems to be a fear that all of the influence and money centred in Leeds since 1999 will get sucked into London leaving Yorkshire, and the north in general, left to plead for money.

Coun Carter insists we can't let that happen, he also maintains any new investment and control should be centred on Leeds. "This city is the driver for the economy of the sub region," he says. "By investing in Leeds you also invest in the region because it brings jobs and prosperity and it ripples out way beyond the city limits.

"I just hope that the new government will make funding available for the LEPs and I'm delighted that the city region councils are going to bid for any partnership that covers the whole of the city region.

"The Government want these to work, so the partners in the local economic partnerships must put their best foot forward to ensure that Leeds city region really engages and looks at how we can improve our economic prospects.

"If, however, they start playing politics then we could miss out and that would be a real tragedy – for Leeds and the rest of Yorkshire."

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